Bailout? Why?

[igor]

I just arrived back from a wilderness trip of two nearly two weeks. On my return, I learned that the Bush Administration is hawking a plan to "bailout" multiple financial institutions. I wrote to our representatative, Congresswoman Woolsey, with the following message. If you agree or don't, let's raise this issue of "why a bailout?" before it passes Congress. (go to: https://woolsey.house.gov/)

My letter: I have operated my own small business for over twenty years in the sure and certain knowledge that if I did not undertake the correct actions over the long haul, I would fail, in which case, I would have to close my doors, seek employment, or perhaps, borrow a tin cup in truly dire straits.

Every one of the companies proposed for bailout were headed by senior executives who collectively made wrong-headed business decisions in the interests of short term profits over the past decade or more. These firms paid their senior executives massive bonuses, often totaling in the hundreds of millions of dollars, for undertaking these wrong-headed moves. Many of the practices that landed these companies in hot water appear to me to be criminally fraudulent.

In any event, the parallel in your home and mine, is to tell your teenager that you are awarding them an annual clothing allowance of $800 (for example) and that they may use that money in any way they choose for clothing. If the teenager spends it before, you make clear that they will have to use their personal money for any additional clothing purchases.

Two months later, your teenager comes to you and says, "Oh, Mom, I've spent all $800 and I really need to buy this new pair of $80 jeans." And you then say, "Oh well, OK. I didn't really mean it." Here's the $80 and by the way, anytime you need more, come and see me.

In short, bailing out these companies amounts to a highly irresponsible long-term act. It encourages financial executives to take inappropriate and unsound risks for the seeming short term benefit of their share prices and annual bonuses.

IF you are in favor of bailing out these companies, I'd like to know why, and in detail and pronto. The Bush administration is apparently attempting to rush through legislation authorizing the bailout and I don't seem to hear a single voice saying, "Why?" There seems to be a presumption that the "deed is already done." Will you stand up? Will anyone?

[MsTerry]

Igor
We are now a communist country.
Government Rules!

I just arrived back from a wilderness trip of two nearly two weeks. On my return, I learned that the Bush Administration is hawking a plan to "bailout" multiple financial institutions. I wrote to our representatative, Congresswoman Woolsey, with the following message...

[lifequest]

Unfortunately, what the Wall Street investment bankers, big insurers and Fannie/Freddies did was perfectly legal after the wave of deregulation started during Clinton and finished with a flouish by Bush. We freed the economy all right and they came up with some complicated ways to pad their pockets and drive on a false economy.

I was expecting them to stick to their pious philosophy and let the market work things out even if that meant a depression and total restructuring. Now they're so scared once the phony economy has become globalized that they can't stick to their fondly held dogma and want you and me to back them up...pat em on the head and say there there, everything will be all right in the end.

Its now working its way down to the local banks...Summit and Exchange Bank are writing off their investments along with the bad construction loans they made. If we write a check for $700 billion what's going to be left to make good on all the banks that are going to go under with their depositors expecting Uncle Sam to reimburse them for their good faith deposits.

It always amazes me that people are so reliably law abiding when their leaders business and political are stealing everything not nailed down and behaving like hardened felons.

We did take a big step down the Socialist/Communist road but it will be short lived once stability gets re-established and then it will be big business as usual. No matter who wins the next election they have a vested interest in the system and the status quo.

I'm trying to figure out why people in general don't seem to be reacting with fear to all that's happening...maybe big business and power are no longer seen as essential to their lives anymore and if they disappeared no one would miss them.

[Braggi]

Unfortunately, what the Wall Street investment bankers, big insurers and Fannie/Freddies did was perfectly legal after the wave of deregulation started during Clinton and finished with a flouish by Bush. ...

Actually, Reagan was the grandaddy of deregulation. See the amazing book: "Inside Job" about the S & L debacle. We didn't learn a damn thing from that. As Reagan signed the deregulation law he declared, "Boys, we've hit the jackpot!" How true. How sickeningly true. Clinton was just as bad. Baby Bush is the worst by far since he fired so many regulators and auditors on day one of his presidency.

And there was a vast amount of law breaking going on in this current cycle. The trouble is, so many were breaking so many laws, there aren't enough investigators and prosecutors to go after all the white collar crooks. And after a year or two, statutes of limitation run out and they got away with whatever the crime was. Usually by the time someone goes into foreclosure, all the crooks have gotten away with the cash.

I propose we demand a "no statutes of limitation" law for white collar crime, that we restore all auditors, investigators and regulators that Bush fired, and that we develop mandatory minimum sentences based on the amount of money a white collar criminal embezzles, cheats out of shareholders, or otherwise steals from his company. I think ten years for every million dollars is about right.

-Jeff

[RichT]

I propose we demand a "no statutes of limitation" law for white collar crime, that we restore all auditors, investigators and regulators that Bush fired, and that we develop mandatory minimum sentences based on the amount of money a white collar criminal embezzles, cheats out of shareholders, or otherwise steals from his company. I think ten years for every million dollars is about right.

-Jeff

Everyone with a hand in this mess needs to be brought to account. This includes those in the legislative and executive branch.

If McCain had a shred of decency, he would resign from his presidential bid and acknowledge to the public his association with those most responsible for our misery.

Rich

[Neshamah]

Deregulation is only a problem when the government rewards bad business. The market cannot work unless companies that make bad decisions face the economic consequences.

~ Neshamah

[Sara S]

Read Mark Morford's column yesterday (24th) on sfgate.com, titled "700 billion fluffy nothings."
The subhead is:
Staggering bailouts? Body counts? Global warming stats? They're just numbers, silly

Unfortunately, what the Wall Street investment bankers, big insurers and Fannie/Freddies did was perfectly legal after the wave of deregulation started during Clinton and finished with a flouish by Bush. We freed the economy all right and they came up with some complicated ways to pad their pockets and drive on a false economy.

I was expecting them to stick to their pious philosophy and let the market work things out even if that meant a depression and total restructuring. Now they're so scared once the phony economy has become globalized that they can't stick to their fondly held dogma and want you and me to back them up...pat em on the head and say there there, everything will be all right in the end.

Its now working its way down to the local banks...Summit and Exchange Bank are writing off their investments along with the bad construction loans they made. If we write a check for $700 billion what's going to be left to make good on all the banks that are going to go under with their depositors expecting Uncle Sam to reimburse them for their good faith deposits.

It always amazes me that people are so reliably law abiding when their leaders business and political are stealing everything not nailed down and behaving like hardened felons.

We did take a big step down the Socialist/Communist road but it will be short lived once stability gets re-established and then it will be big business as usual. No matter who wins the next election they have a vested interest in the system and the status quo.

I'm trying to figure out why people in general don't seem to be reacting with fear to all that's happening...maybe big business and power are no longer seen as essential to their lives anymore and if they disappeared no one would miss them.

[lifequest]

All the political scrambling going on now brought to mind a funny incident from a year ago or so...the college student disrupting a meeting and police tasing him. His cry of "don't tase me bro" could be turned into "don't bail me bro!"

T-Shirts, protest signs...I'm not rushing to trademark this though...might need a loan to finance the start up costs and which banks are offering credit?

[Braggi]

How did this happen, exactly?

"JPMorgan Chase & Co. (NYSE: JPM) paid $1.9 billion to the FDIC to acquire WaMu’s deposits, branches and a loan portfolio valued at $176 billion."

Can I make a deal like that? $176 for every $1.90 paid? Um, really? I think I can scrape up a few bucks for a deal like that.

Is this crooked as Hel or am I just not getting it?

-Jeff

[MsTerry]

The part you are not getting is that it was only offered to JP.
Why was there no bidding going on?

How did this happen, exactly?

"JPMorgan Chase & Co. (NYSE: JPM) paid $1.9 billion to the FDIC to acquire WaMu’s deposits, branches and a loan portfolio valued at $176 billion."

Can I make a deal like that? $176 for every $1.90 paid? Um, really? I think I can scrape up a few bucks for a deal like that.

Is this crooked as Hel or am I just not getting it?

-Jeff

[Braggi]

The part you are not getting is that it was only offered to JP.
Why was there no bidding going on?

The part you are not getting is that it was offered world wide and only JP was interested. I heard that on the radio so I know it's true.

-Jeff

[MsTerry]

nonononono, it was offered worldwide a week or so ago.
Not under the cloak of darkness,in a hush-rush session like the final one.
BTW, which radio station gave out that info?

The part you are not getting is that it was offered world wide and only JP was interested. I heard that on the radio so I know it's true.

-Jeff